It comes as no surprise that Guyana’s gold industry outdid itself once again this year, topping 300,000 ounces for the second consecutive year and earning the country upward of US$346 million, reportedly, the best performance by the sector since the closure of Omai Gold Mines Ltd five years ago. The incentive to mine more gold, of course, reposes in the continually upward trend in prices on the world market and it is perhaps worth repeating that sugar (which has had a disastrous year) and rice have now taken back seats to gold as the country’s major money earners.
While both the Guyana Geology and Mines Commission (GGMC) and the Guyana Gold and Diamond Miners Association (GGDMA) have declared that they are pleased with the performance of the sector, it is no secret that all is far from well with the gold industry and the point is certainly worth making given the importance of the sector to the economy.
What is clear in the first instance is that the mining sector now has to live by far more stringent regulations that have to do with the environment and in this regard the sector has already begun to come under greater government scrutiny. Regulations that require miners to conduct exploratory work and to give advance notice of their intention to mine an area may conform to official environmental requirements but they are certainly likely to prove costly particularly for smaller mining operations. Indeed, the situation has become sufficiently worrisome for persons with knowledge of the industry to predict that some smaller operations may well be forced out of business.
The other point to be made is that the discourses between government and the industry over mining and the environment have created a ‘wait and see’ climate which has meant that some of the anticipated major investments in mining operations which were reportedly scheduled to come on stream last year simply did not materialize. Indeed Stabroek Business understands that had the prevailing uncertainties associated with environmental considerations not existed gold yield for last year could have been far higher, perhaps as high as 500,000 ounces.
The lucrative nature of the gold industry has reportedly resulted in a shift of interest to gold mining among several potential investors who, hitherto, had little if any interest in the sector. Understandably, attention has shifted to the role of government, through the GGMC in the allocation of claims and, as well, to whether or not smaller mining outfits, that are simply unable to afford the high cost of living within the environmental strictures, will eventually be elbowed out of business; and as in every pursuit where the financial stakes are high there is considerable potential here for an increased level of official corruption.
Then there is the question of the rights of the indigenous peoples which, all too frequently, are compromised by indiscriminate mining practices – to which some Amerindians themselves reportedly contribute – that compromise the way of life of entire communities. Whether in the light of what would now appear to be an unstoppable gold rush and the attendant ill-discipline the GGMC is in a position to properly oversee mining operations becomes a matter of considerable speculation. Certainly, reports on the Commission’s track record in terms of maintaining good order among the miners have not always filled one with any great measure of confidence.
The biggest challenge for the gold industry in the period ahead, however, will be the need to balance the importance of taking advantage of high world market prices by maximizing production against environmental considerations that will require stringent and conceivably costlier mining practices.
What happens in the short term is likely to depend on government’s – or more specifically, President Jagdeo’s – pronouncement on the report of the Special Land Use Committee set up by the administration to review the mining sector. Despite the cause for celebration occasioned by the 2010 performance of the gold industry the future of the sector may well still lie in a balance.
